Honeywell Aerospace is looking very cheap, so it's a good time to scoop up its shares, according to Morgan Stanley. The investment bank upgraded the aerospace name to overweight from equal weight. It has a price target of $205 on shares, implying nearly 28% upside from Tuesday's close. "Our fundamental concerns have not disappeared: HONA screens toward the lower end of peers on revenue and EBIT growth, margin expansion is limited, [free cash flow] conversion trails peers, and lower next-generation Commercial [original equipment] content could constrain the long-term aftermarket opportunity," analyst Kristine Liwag said in a note to clients. "We believe the valuation now more than compensates for these risks. HONA warrants a discount to peers, in our view – but not the ~35% discount reflected today." Shares of Honeywell Aerospace have fallen roughly 24% in the past month. The company was spun out from Honeywell in late June, as supply chain issues have stymied its operations. HONA mountain 2026-06-29 Shares are down roughly 27% since June 29. The stock trades at roughly 16.8 times its estimated price-to-free cash flow and about 11.4 times its expected enterprise-value-to-EBITDA for 2028. That makes it the cheapest large cap aerospace stock covered by Morgan Stanley. At current levels, Honeywell Aerospace is pricing in a more protracted operational recovery as well as a structurally lower long-term earnings and free cash flow base, Liwag said in her note. "We see risk to the former, but believe the latter is overly punitive given HONA's installed base, aftermarket exposure, defense portfolio, and underlying end market demand," the analyst wrote. Morgan Stanley's call goes against consensus on the Street. Of the 15 analysts covering Honeywell Aerospace, 10 have a hold on the stock and five have a buy or strong buy rating on it, LSEG data shows. Shares climbed more than 2% following the upgrade.